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Question 1 Which of the following is not an analytical measure used by the NBER

ID: 2745630 • Letter: Q

Question

Question 1

Which of the following is not an analytical measure used by the NBER to examine behavior within a series?

Diffusion indexes

Rates of change

Direction of change

Ratios among series

Comparison with previous cycles

Question 3

Excess liquidity is defined as

The year-to year percentage change in the M2 money supply less the year-to-year percentage change in the nominal GNP.

The growth rate in M2 money supply less the growth rate in M1 money supply.

The year-to-year percentage change in the M1 money supply less the year-to-year percentage.

The year-to-year percentage change in the "real" GNP less the year-to-year percentage change in the nominal GNP.

None of the above

Question 4

All of the following factors affect the required rate of return except

The economy's risk free rate.

Corporate business risk.

Return on equity.

Country risk.

Expected rate of inflation.

Question 5

Evidence that a firm has high business risk would be provided by its volatile ____.

Fixed costs.

Profit after taxes.

Operating profit.

Sales.

Employee turnover.

Diffusion indexes

Rates of change

Direction of change

Ratios among series

Comparison with previous cycles

Explanation / Answer

Solution for question 1

National Bureau of economic research (NBER) is a research organization conducting research about how economy works. It consider various methods and factor for conducting research about economy.

Analytical measure used by the NBER to examine behavior within a series is mention below:

1. Diffusion indexes

2. Rates of change

3. Direction of change

4. Comparison with previous cycles

So expect “Ratios among series” all of the analytical measure are used in NBER research.

Hence, Option (D) is correct answer.

Solution for question 3

Excess liquidity is defined as “The year-to-year percentage change in the "real" GNP less the year-to-year percentage change in the nominal GNP.”

Hence, option (D) is correct answer.

Solution for question 4

Required rate of return is calculated by using CAPM model, and formula for CAPM model is mention below:

Required rate of return = Risk free rate + (Market Return - Risk free rate) × Beta

Risk free rate is denoted by economy risk free rate, corporate business risk is calculated by subtraction of risk free rate from market return it is Alco called risk premium. Country risk is denoted by beta and market rate of return is denoted by rate of inflation level.

So expect Cost of equity all option are used in calculation of cost of equity.

Hence, option (C) is correct answer.

Solution for question 5

Increase in volatility of operating profit shows the increase in business risk for company.

Hence, option (C) is correct answer.

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